The Concept of Low Cost Apartment in Nepal

Whenever, we see an advertisement in daily newspaper referring to Apartments available in 13 Lakhs to 14 Lakhs, we do not try to understand more about it. People rush to the Apartment office or the site office. I myself was very surprised, when I went to the Mero City Apartment office in Hattiban. The site was packed with visitors cars, as if a wedding reception was going on. Inside the office were around 20 Sales girls. All were busy explaining their apartment features to the customers. In fact, when I asked for the brochure, the number of brochure also had finished. The hall was packed with customers and I could see some bookings were done.

The model apartments and the computer aided 3D movie were in display. People were busy viewing it.

The price range of the Apartment was amazing. The price range of the Mero City Apartment varied from Nrs 1,500,000 for 1 BHK (386.45 sq.ft) to Nrs 4,000,000 for 3 BHK (1013 sq.ft)

Similarly Eastern Apartment by Aayusha Developers a subsidiary of Oriental Builders Pvt. Ltd in Kaushaltar also was a huge attraction for Apartment buyers.

The builders have opened the booking for only 348 of the total 448 apartments. However, they were able to sell 50% of the total booking in just first 5 days. The huge response from the customers surged the developer to call all the 448 units on booking.

Due to the huge demand, the developer requested the interested buyers to fill up an application form along with a cheque of NRs 10,000. The applicant would get the apartment on first come first serve basis.

These are the basic strategies for Developers which was already been implemented by Guna Colony for their sale of their Bhaisepati Apartment. Then, they had opened booking for the Bhaisepati Apartment price starting from 13 Lacks. There was huge respondent to the Apartments in Bhaisepati which was organized in the Real Estate Expo in Bhrikuti Mandap, Kathmandu.

Most of these apartment sizes is ranging from 386.45 sq.ft to 548 sq.ft. The apartment size of 300-500 Sq. ft is very small for a family to live in and are similar to Studio Apartments abroad. These kinds of Apartments can adjust 1/2 people in a family to live in. The Rooms are very tight and no space for adding more luxury items.

The customers must not just make their decision by viewing the 3D Modeled video. The actual room and the customers view before buying the apartment might actually just not match.

Another important factor to decide before making the booking is that the customer must check the background of the Apartment Developers. Normally, we must only trust experienced Apartment Developers. These low cost apartments that are coming up in the market have been raising huge amount of funds from the market for the Proposed Apartment/Housing. The delivery and execution of these apartments is a real challenge and we must wait and see, if they can really develop these projects and their handover to their customer. So far, the construction of any of these low cost apartments has not started yet.

Some established developers claim that the price the low cost apartments are offering is suspicious. Some claim that these low cost apartments are very expensive if one calculates the rate per sq ft. Such small apartment size is not feasible for a family to live in.

The Eastern Apartment is the least expensive with price per sq. ft of Nrs 2,890 followed by The Sun City. The most expensive is the Imperial Court. However the target market for both the apartments is completely different as Imperial Court is a Luxury Condominium.

And when we compare the different apartments, all has different facilities. Some important comparison factors of the facilities for different Apartments are as following:

1. Location of the Apartment
2. Number of Lifts
3. Size of the Balcony
4. Project Land Site Area
5. Size of the swimming pool
6. Open Area
7. Distance from the city
8. Quality of finishing goods and specification
9. Developers profile & Construction company associated

The Apartment buyers must also think in mind the extra facilities the Apartment has. Normally, these apartments will have very poor infrastructures and facilities. They might actually come up with a very small swimming pool & very less open space.

And not to forget is the fact that these low cost apartments come with hidden cost. Mero city Apartment comes with cement flooring. If you want a Parke ting or tiles on the floor, you will have to add all the internal decorative items for the Apartment.

This will at least cost you Nrs 400,000 to 500,000 for the completion of the Apartment. So the Total cost for the 391 sq.ft Apartment is now Nrs 2,000,000 which actually brings the price per sq.ft for the Apartment to Nrs 5115.

Similar is the case of the Eastern Apartments. The Eastern Apartment comes with no finishing in the bathrooms. The buyers will have to finish the bathroom costs & Tiles which will also cost them minimum extra NRs 400,000 to 500,000 for their flats. This will cost the buyers of Eastern Apartment an average cost per sq ft of Nrs 3,608.